Nomi Prins talking:
What John Stumpf did is he let 5,300 people take the fall for his criminal behavior. That’s what he did. This particular case that was in front of the Senate Banking Committee early this week is a tiny portion of the array of criminal activity that Wells Fargo has basically done under the direction of John Stumpf. John Stumpf has been the CEO since 2007. He has been chairman of the board of Wells Fargo since 2010. He has been there through the beginning of the financial crisis ’til now, and he has presided not just on this case, where 5,300 people were involved in technically possibly creating phony accounts for credit cards and for depositors in order to charge fees, in order to make those cross-sell objectives, that are set on high, but for years he was knowledgeable of it. And during those years, Wells Fargo racked up about $10 billion. This fine, on this particular set of activities, was only $185 million. Wells Fargo has racked up $10 billion worth of fines for criminal activity, from foreclosure abuses to defrauding the government to abusing Hispanic and African-American communities with respect to mortgage-related activities. They have done an array of crimes, all under John Stumpf. He has let, in this particular case, 5,300 people take the fall for one of them.
Because in this case, and throughout all those multiple cases, of which Wells Fargo and all our other large banking institutions, I might add, have been involved in in different ways, the government refuses to prosecute any of these people, because it doesn’t want to. If you and I and Amy were sitting there committing grand larceny across state lines, we would not only walk out—we wouldn’t be in that room, right? We’d be walking out of that room, we’d be serving some serious jail time. But in the case of these people, they not only have committed crimes by directing crimes—that’s what happens when you are going through—you take your minions, and you just sort of direct them to do your bidding.
In John Stumpf’s case and in that mortgage case that you’re talking about, Juan, that was related to a $5.2 billion settlement that Wells Fargo did with the Department of Justice. And as part of that settlement, it was supposed to provide certain information and stop certain abuses. It was actually recharged by the attorney general in New York for not complying with its settlement. This was in 2012. This is where John Stumpf was supposedly knowledgeable of this other smaller crime and not doing anything about it. He should have walked out of that Senate committee, been handcuffed, been indicted and had all of these multiple charges put upon him as the director of this institution.
The Obama administration has not gotten behind prosecuting any of the individuals at the top of these banks. So we basically have three sets of individuals at the head of three of the six largest banks in the country—we have John Stumpf at Wells Fargo, we have Lloyd Blankfein at Goldman Sachs, and we have Jamie Dimon at JPMorgan Chase—who have not only benefited from the post-crisis environment and what the government has allowed them to get away with, their institutions have all grown and flourished, as they’ve been paying very small settlements related to what their profits are to the United States government. So the Obama administration has done a very poor job of handling the criminality of the banking system, of changing the banking system, of personally making responsible, on a—from a criminal basis, the individuals that run the largest institutions in this country.
In addition, it has not broken up the banks. We have a situation where these large banks and these individuals control so many assets and so many deposits of the American people, because they are allowed to do so because of our regulatory framework. Our regulatory framework in the post-Glass-Steagall-repeal environment, which happened under Bill Clinton, before Obama came into power, still exists. That’s why there is so much power in these institutions. That’s why these individuals get away with so much. And that’s why the Obama administration has done a very poor job of changing any of that for the benefit of our country or for economic stability going forward.
John Stumpf might be criminally investigated. But as we’ve seen, that, A, hasn’t happened, so that makes a very, very low probability. And if he is, remember all the money that he has made, and that Elizabeth Warren talked about that he’s made during this period, and not just from this crime but from all the multiple ones that have led to those $10 billion worth of settlements, have not only enriched him, but even the fines for them have not come out of his own pocket. He’s had zero accountability, zero cost to himself personally, zero reason to resign.
And the other reason for not resigning is he runs the board there. Normally, in a situation in a company where you’re talking about a resignation, there’s a board decision, there’s an analysis of what’s going on in the company, there’s a recommendation to keep or get rid of a CEO. None of that’s happened, because he runs the board. And this is the case in other banking institutions, as well. this is Jamie Dimon at JPMorgan Chase and so forth. But he runs the board. so that’s why it’s very unlikely he’ll resign. That’s why it’s very unlikely we’re going to see him in cuffs or indicted.
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Nomi Prins
former managing director at Bear Stearns and Goldman Sachs and previously an analyst at Lehman Brothers and Chase Manhattan Bank.
— source democracynow.org